WashU MGT 100 Exam 1 (Kiousis)
UPDATED ACTUAL Exam Questions and
CORRECT Answers
What are the 4 kinds of profit firms? - CORRECT ANSWER - Sole proprietorship,
partnerships, Limited Liability Company, Corporation
What does a non-profit firm do? - CORRECT ANSWER - Provides goods and services but
do not have the fundamental
purpose of earning profits
What type of firm is there the most of in the U.S.? - CORRECT ANSWER - Sole
Proprietorship
What type of firm in the U.S. has the most total net income? - CORRECT ANSWER -
Corporation
What does the Modigliani-Miller Theorem say? - CORRECT ANSWER - The total value
of a firm should not depend on its capital structure
How can maturing start-ups can raise equity capital? - CORRECT ANSWER - Angel
investors, venture capital firms
How can infant start-ups can raise equity capital? - CORRECT ANSWER - Family,
friends, earnings
How can mature private firms can raise equity capital? - CORRECT ANSWER - Private
equity firms, institutional investors, corporate investors
, How do mature public firms raise equity capital? - CORRECT ANSWER - Public equity
What are the two ways a firm can bring their equity to public markets? - CORRECT
ANSWER - Initial public offering, direct listing
What are the benefits of going public? - CORRECT ANSWER - Facilitates takeover
activity, cost of capital, pecking order, allows insiders to cash out
What are some considerations about going public? - CORRECT ANSWER - Control and
decision making authority, under-pricing of IPOs, avoid ownership dilution, bad market industry
conditions
What are some factors that influence IPO timing? - CORRECT ANSWER - Taking
advantage of bull market, IPO market conditions, need external capital to grow at certain points
in growth cycle
What is an stock market index? - CORRECT ANSWER - A collection of stocks that is
representative of the stock market.
What does the Dow Jones consist of? - CORRECT ANSWER - 30 most significant stocks
in the stock
market
What does the S&P 500 consist of? - CORRECT ANSWER - 500 largest companies on
the US stock
market
What does the NASDAQ Composite consist of? - CORRECT ANSWER - All stocks on
the NASDAQ
UPDATED ACTUAL Exam Questions and
CORRECT Answers
What are the 4 kinds of profit firms? - CORRECT ANSWER - Sole proprietorship,
partnerships, Limited Liability Company, Corporation
What does a non-profit firm do? - CORRECT ANSWER - Provides goods and services but
do not have the fundamental
purpose of earning profits
What type of firm is there the most of in the U.S.? - CORRECT ANSWER - Sole
Proprietorship
What type of firm in the U.S. has the most total net income? - CORRECT ANSWER -
Corporation
What does the Modigliani-Miller Theorem say? - CORRECT ANSWER - The total value
of a firm should not depend on its capital structure
How can maturing start-ups can raise equity capital? - CORRECT ANSWER - Angel
investors, venture capital firms
How can infant start-ups can raise equity capital? - CORRECT ANSWER - Family,
friends, earnings
How can mature private firms can raise equity capital? - CORRECT ANSWER - Private
equity firms, institutional investors, corporate investors
, How do mature public firms raise equity capital? - CORRECT ANSWER - Public equity
What are the two ways a firm can bring their equity to public markets? - CORRECT
ANSWER - Initial public offering, direct listing
What are the benefits of going public? - CORRECT ANSWER - Facilitates takeover
activity, cost of capital, pecking order, allows insiders to cash out
What are some considerations about going public? - CORRECT ANSWER - Control and
decision making authority, under-pricing of IPOs, avoid ownership dilution, bad market industry
conditions
What are some factors that influence IPO timing? - CORRECT ANSWER - Taking
advantage of bull market, IPO market conditions, need external capital to grow at certain points
in growth cycle
What is an stock market index? - CORRECT ANSWER - A collection of stocks that is
representative of the stock market.
What does the Dow Jones consist of? - CORRECT ANSWER - 30 most significant stocks
in the stock
market
What does the S&P 500 consist of? - CORRECT ANSWER - 500 largest companies on
the US stock
market
What does the NASDAQ Composite consist of? - CORRECT ANSWER - All stocks on
the NASDAQ
